Unexpected Hack Drains 150,000 SUI from Scallop’s Old Contract
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In a recent security breach, Scallop lost 150,000 SUI from a previously overlooked rewards contract linked to its sSUI spool. Fortunately, the main funds remained secure and the protocol committed to a full reimbursement.
The breach went unnoticed for a time, with the contracts being frozen before many users realized there was an issue.
Scallop, which operates on the Sui blockchain, disclosed that an attack had successfully exploited a deprecated contract associated with its sSUI rewards pool, resulting in the loss of approximately 150,000 SUI. The team promptly confirmed the incident, stating on X that they had immediately frozen the affected contract. They reassured users that the core contracts remained unscathed.
The compromised contract was described by Scallop as a deprecated rewards system, indicating it was an outdated component of their infrastructure. Notably, it was not linked to the primary protocol or user deposit vaults, yet it still contained valuable assets.
Upon confirming the breach, Scallop took quick action, freezing the compromised contract as soon as they became aware of the issue. The team assured users that only the sSUI pool was affected while all other operational pools continued to function normally.
The loss, approximately 150,000 SUI, raises concerns given its significance at current market values.
Just hours after the initial response, Scallop provided an update, indicating that core contracts were unfrozen, and operations resumed. Withdrawals and deposits became operational again, with the team clarifying that the incident had no impact on the main protocol, being strictly confined to the deprecated contract.
User deposits were never at risk, according to the announcement, with Scallop ensuring that the full amount lost would be reimbursed without any partial payments.
This incident sheds light on a worrying trend within the Sui blockchain ecosystem, where several DeFi protocols have faced significant losses due to hacking incidents. Recently, Volo Protocol encountered a similar fate, losing around $3.5 million before they could intervene.
Experts have raised alarms about the vulnerability of deprecated contracts that still hold funds but lack ongoing oversight. The hacker in this instance was able to exploit precisely that weakness.
In light of the breach, Scallop has committed to enhancing the security of its protocol moving forward. As of the last update, no additional anomalies had been reported in the system.
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